We all know how home warranty should work in an ideal world. You sign a service contract that covers certain home appliances and systems and when they break down, your home warranty covers the costs of fixing or replacing them. Instead of finding skilled repairmen on your own, you are required to contact one of the contractors from the company’s network of contractors, who then comes to your home and repairs the appliance or system. If the contractor cannot fix it, the home warranty company will replace it.
But, what happens when your home warranty claim is denied? Where do you go from there? How do you get your money?
If you think this is something that happens only to people who are not careful, you are wrong. Thousands upon thousands of home warranty clients regularly report companies that fail to honor the contract, despite the fact that the claims of the clients are 100 percent legitimate.
Obviously, the first step is determining whether your claim is really 100 percent legitimate. In order to do so, you will need to consult the documents that you received when purchasing your home warranty. Depending on the company you are doing business with, you have to make sure that your claim is in accordance with their terms and conditions. Basically, before you take any further steps, you need to be absolutely certain that your claim is in compliance with the rules of the home warranty plan you opted for.
For example, a number of home warranty companies require regular maintenance records in order to honor the claim. When it comes to smaller appliances, people usually fail to do this or keep the records. In addition to this, home warranty companies often limit the types of problems that their plans cover. Furthermore, they are very well versed in adding all kinds of disclaimers and special points that will void one’s warranty. To put things colorfully, their small print often has small print.
If you determine that your claim is definitely legitimate, it is time to contact your home warranty company again. This time, you will want to write down every single detail of your conversation with their representatives. Log down the dates, the times of the conversations, as well as the names of everyone you come in contact with. They do not have the right to refuse to give you their names. You will then want to ask them for the paperwork needed to appeal their denial of your claim.
In the meantime, you should find a third-party professional who will do an evaluation of the problem and put it in writing. They should also provide you with an estimate on how much it would cost to fix the problem or replace the appliance or system that has failed.
Each home warranty company is going to have its appeals process described in the documentation you received when signing a contract with them. In most cases, they prefer mediation over handling the appeals in court and you should never skip steps. In fact, mediation might work out better for you since it is a cheaper process.
If the mediation does not provide an outcome you were hoping for and you still believe you have grounds for more appeals, you should contact the Better Business Bureau and file a complaint. Most home warranty companies are quick to respond to such complaints, as they will do everything in their power to avoid getting their rating bumped down. If this doesn’t work, you will have to take drastic measures and approach the attorney general’s office. In the United States, home warranty fraud and service denials are usually handled by the attorney general.
From there on, you can file a lawsuit. If it is a smaller claim, you should reach out to a small claims court that will then handle your case. If a claim is large enough, you will probably need an attorney who will handle the case in court. When choosing a lawyer, you should never rush things. The most important thing here is to make sure they have enough experience in handling this type of cases.
As you can see, handling a denied home warranty claim often requires quite a bit of time and money. When you combine this with the fact that the majority of home warranty companies feature clauses in their contracts that state you cannot sue for more than a limited amount, it becomes obvious that you need to think long and hard about whether it makes sense to even appeal the decision. Of course, the best way to prevent something like this from happening is to only do business with reputable home warranty companies that regularly honor their clients’ claims.